Question:

What is a deed in lieu of foreclosure?

Answer:

If you are a troubled customer with foreclosure pending on your property, you would like to know what options there are to avoid foreclosure and what is a deed in lieu of foreclosure. In fact, your lender may be willing to help you stay in title of the property, or assist you with finding another institution willing to do this for you until you get back to financial stability again.

However, if those options have been exhausted or considered inapplicable, a deed in lieu of foreclosure will save you and your lender potential costs of court proceedings, as well as settle any mutual obligations in a shorter time.

A deed in lieu of foreclosure will transfer your ownership to the lender clearing any obligations on your part as specified on the loan papers and will save you from having a foreclosure listed with your credit report.

If the property is worth more than what is owed on it, you and the lender may choose to have it liquidated. Additionally, before a deed in lieu of foreclosure is executed, the lender has to ensure the property is not additionally encumbered.

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